It's almost surprising that The Canyons is an actual movie; when it was grabbing attention at various points last year, it felt more like a marketer's viral campaign or a spoof that was almost too on-the-nose to be considered clever. A respected director teams with a combative author, they ask the public for $150,000 to make a film about morally depraved wannabe actors, and then go ahead and cast a tabloid curiosity and a porn star in the leading roles? It sounds like a satire, right?

Well, The Canyons is very real, with real dialogue spoken by real humans on real sets. It is directed by Paul Schrader, who speaks glowingly about what he promises are the magical qualities of this movie's star, Lindsay Lohan. Schrader, a 40-plus-year veteran of the industry with credits that include Taxi Driver (as a writer) and American Gigolo, insists that the troubled former Disney starlet is blessed with a rare talent that often drives her to extreme measures in search of empathy for her characters; he's even compared her to Marilyn Monroe. At the same time, he's an honest guy, and admits that her public image and personal difficulties played into the decision to cast Lohan, given the movie's viral marketing goal and tiny budget.

"Part of the incentive was, of course, she has a high profile," Schrader told BuzzFeed late last week, adding that he hoped that the movie — and what would become a widely read New York Times Magazine feature about its production — would help rehabilitate her image and prove her professionalism.

"I hired her because I thought it would be terrific for her in that way, and also because she has a kind of magic, and also of course because we're making a film for nothing," Schrader continued. "She's getting $100 a day, and an actress has to be in a certain place to accept that. And the fact that she's not insurable is a big factor in her ability to work. Well, we're not paying for insurance anyway. If I had to pay for insurance on Lindsay, it would be more than the budget for the film. So we made the film without insurance."

In all, the movie cost $250,000 or so to produce, with Schrader, Bret Easton Ellis, and producer Braxton Pope each kicking in $30,000 apiece. It was bought by IFC this winter and will be released via VOD on Friday; the following is a conversation with Schrader about the movie, its stars, and his take on the current state of Hollywood.

There were so many ups and downs during the production of this movie with Lindsay. Was it difficult to watch?

Paul Schrader: As I said to Lindsay on several occasions, it must be so difficult to be you, to live in this cone of chaos. And I don't know whether she does it voluntarily or not, and it seems to be part of how she exists. She's in a very good place now, she's 27 now, and it's time to grab the reins. I'm still in touch with her. There's a lot of people who really wish her ill, and there's a lot of people who really wish her well too.

Do you think the media attention perpetuates it?

PS: Absolutely. As I said in that Film Comment piece, you get rewarded for things you shouldn't get rewarded for. You get rewarded for creating headlines and you don't get protected, and there's nobody to protect you. I think it's much harder for an actress. When you read about actors in previous times, the amount of hanky-panky they did and the amount of misbehavior, that was all behind closed doors. I don't think any of our current actors can hold a candle to the misbehavior of their predecessors, because everything they do is public.

And, in a way, the movie benefits from that, so it's a give and take situation.

PS: Yeah, I mean, in the world of new media, you have to sow the wind, and when you do that, you reap the whirlwind.

The movie begins with a montage of broken down, abandoned movie theaters, which was a pretty pointed message.

PS: In the very first email, I said to Bret, when I proposed we do this thing together, I described it as cinema for the post-theatrical era. So from moment one, it was envisioned as VOD — and everything we have done, from the financing to the casting to the making to the promotion to the release, has been done through social media. The phrase "straight to video" used to be derogatory, but I think we're entering an era now where you can have must-see VOD that is not stigmatized that way.

That, and when I had my first table read with the cast, I told them that this is a story about some twentysomething Angelenos who got in line to see a movie. The theater closed, but they stayed in line because they had nowhere else to go. It's this idea of kids making a movie who don't really like movies that much seemed to be kind of defining of a generation. So that's where the theaters came from.

What's your take on the industry right now, as it currently exists?

PS: You mean, those dinosaurs wandering around in the swamps of La Brea? They're going to come crashing down. I don't see any other way. The studio system is hanging on and thanks to foreign territories, they're still hanging on. But the way of the future is pretty clear. Amazon and Google will replace Warners and Universal.

Have you seen any movies this year?

PS: Yeah. It has to be something special to take me to the theater now, because I watch a lot at home. Last night I watched this film The Time Being, and a few days before that I watched Only God Forgives. I watched them both at home. Why would I go out to a theater?

Have you seen Man of Steel or any of those big movies?

PS: You usually see the first one and then you don't have to see the rest. So if you see the first Iron Man, you get a free ride, you don't have to see any more. But I did like Pacific Rim.

I know that James Deen was Bret's choice for the role of Christian, and you weren't sure about it. How did that work out?

PS: I was as surprised as the next person. I didn't think this was going to work, but as soon as I started testing him and started talking to him, I realized we might have something. And my wife, who's an actress, was really opposed to the concept of him, she saw his test and said, "James Deen is a star."

Would you cast him again?

PS: Of course I would, given I had the right role for him. You don't cast people because you like them, you cast them because they're right.

But you think he has a future in this industry?

PS: I don't know, we'll see. I was just talking to him the other day. He's still hard at work; he was complaining about going to Venice, because he was going to lose money, going to lose $10,000 of work time. I said, "James, at some point you've got to get out."

Is Bret Easton Ellis difficult to work with?

PS: Not at all. Not at all.

Because he has a public profile.

PS: Well, he's a provocateur. As I said to him when Gore Vidal died, I said, "Bret, you've got to step up now. Gore's slot is open."

So what do you expect to be the result of all this, once people see it?

PS: I don't think you can really predict what people will take away from something. If you create something that is interesting and gives people something to think about and enlarges their consciousness of a certain moment, that's about all you can do as an artist. If you try to start predict their reactions, you're not really working in the moment anymore.

How would you compare it to the movies in theaters this summer?

PS: Well, it depends on which cinema you're talking about. There's two cinemas going on: The Chinese-Russian cinema, of Wolverine and Pacific Rim, and then there's the independent cinema. The last two movies I saw, which was The Time Being and Only God Forgives, I saw VOD. Obviously this was designed as VOD concept from day one. My first email to Bret, I described it as cinema for the post-theatrical generation.

You've got quite a long record of films; do you feel like the industry uses people and then spits them out?

PS: (Laughs) They're going to spit you out so fast. No, I started working in the studio system, my first five films, and then studios stopped making films I was interested in. And then I went to work in the independent system for several decades, and now the independent system is starting to give way, and so I moved to the kind of DIY, VOD system. But it's just a way to keep working. If the studios were making films I wanted to do — or the studios would let me work, I would love to let me work for them. But there's only a handful of directors who can make films for the studios.